Affording college has rarely been so hard. The loss of 9.5 million jobs in the last year means that few students and families have savings, and it is more challenging than ever to work to pay for school. Fortunately, Washington just authorized funding to help. This spring colleges and universities will have more than $25 billion in emergency aid to distribute to their students. To decide who gets it, they should not rely on information from the Free Application for Federal Student Aid, or FAFSA. While using the FAFSA might seem to be the most expedient approach, it is likely neither the most equitable nor the most impactful.
The FAFSA has long misunderstood students’ and families’ ability to pay for college. It captures a very narrow view of financial circumstances and labels in order to create its picture of the Expected Family Contribution, or EFC. That number is based on tax information from two years ago (unless the student appeals, in which case the data are from last year’s taxes), and it does not consider debt, which has been rising during the pandemic. The EFC is also artificially truncated at zero, even though its real value can be (and often is) negative, particularly when students are helping out their families financially. This makes it even harder to decide how much help a student truly needs.
The flawed EFC is central to how traditional financial aid is allocated. But it should not be used to determine who gets emergency aid during a pandemic. Fortunately, Congress decided that those funds are not part of the standard federal financial aid program known as Title IV. Colleges and universities therefore have the freedom to distribute stimulus funds without requiring the FAFSA or using the EFC to determine need, and the emergency aid won’t be subject to the traditional audits.
Institutions should embrace that freedom. They should assess students’ current needs, including any material hardships students face, regardless of family income. The FAFSA does not consider many factors driving basic needs insecurity, including a student’s current living situation, health status and current use of public benefits programs. An LGBTQ student estranged from their middle-class family may be ineligible for need-based grants even though they lack parental support. Due to campus closures, the student may be couch-surfing and food-insecure. They may not be Pell-eligible, but that student needs emergency aid.
The enormous federal investment in emergency aid, and the uncommon freedom for institutions to distribute it in nontraditional ways, is an extraordinary opportunity for institutions to promote enrollment, retention and even reenrollment for some of the most vulnerable people in the country.
In contrast, a low-income student with a $0 EFC may have benefited from the CARES Act, expanded access to the Supplemental Nutrition Assistance Program and a stimulus check, and thus be in a stable situation. On the other hand, a student with the same official EFC but an actual negative EFC may be unable to pay rent or utilities and be helping out her parents, who are out of work.
Using the FAFSA would likely lead institutions to cut checks to both of these low-income students but not to the LGBTQ student.
And, of course, the FAFSA cannot assess the needs of students who don’t file it — the millions of undocumented students, international students, noncredit students and dual-enrolled students, all of whom are, according to the law, eligible for the latest rounds of federal emergency aid funds. Even individuals who were enrolled in college in 2020 but left without a degree are now eligible for federal emergency aid.
It is time for higher education leaders to embrace the freedom that Congress afforded and rethink how they assess need and get money to students. Colleges can do better without creating multiple applications or hassle. It is hard to transform practices during such a stressful time, and difficult to trust the U.S. Department of Education to support innovation so soon after the reign of former Secretary Betsy DeVos and her constantly changing guidance. For some, these funds bring unwelcome additional work, and the payoff may seem unclear. But it should not be.
Consider a recent experiment at Compton College, a community college where most students have exceptional need. Last spring Compton engaged Edquity, an emergency aid technology platform, to deliver philanthropic dollars. Rather than relying on the FAFSA, Edquity uses a short, evidence-driven application with validated questions to assess need. Students apply online, completing the form in just seven minutes. Decisions are rendered and funds distributed within 48 hours.
In total, 289 students applied for support, and based on Compton’s available funds, 90 received grants. Some were on their way to degree completion but risked being derailed by the pandemic. According to an evaluation by an economist, just 11 percent of students who did not receive emergency aid completed their degrees by August, while 22 percent of comparable grant recipients graduated. That sizable difference is statistically significant.
Contrast that with a study by The Hope Center for College, Community, and Justice, in which researchers collected data from students at 155 institutions in 42 states showed little evidence that emergency aid distributed under CARES, with its focus on the FAFSA, was effective.
But that does not mean that dollars aren’t needed. Rather, it may suggest that FAFSA was not good at targeting the support.
The enormous federal investment in emergency aid, and the uncommon freedom for institutions to distribute it in nontraditional ways, is an extraordinary opportunity for institutions to promote enrollment, retention and even reenrollment for some of the most vulnerable people in the country. Doing so is critical for the finances of students and institutions. Let’s not let the FAFSA get in the way.
Sara Goldrick-Rab is a professor of Sociology and Medicine at Temple University, president and founder of The Hope Center for College, Community, and Justice and chief strategy officer at Edquity.